Stock Update: Despite 42 percent stormy rise, Vodafone Idea’s share will now come at Rs 10, the leading brokerage firm predicted.

New Delhi. Indian Financial and Capital Market Sector’s leading brokerage firm Motilal Oswal has made a very shocking prediction regarding the shares of telecom company Vodafone Idea (Vi). Despite the stormy rise of more than 42 percent in the shares of this company and the recent excellent quarterly results, the brokerage has given ‘Neutral’ rating on this stock. Along with this, the target price has been reduced to Rs 10 per share, which represents a huge decline of about 22 percent from its current market price.

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The operating profit (Earnings Before Interest, Taxes, Depreciation, and Amortization) of this company increased by 4.9 percent year on year to Rs 4,889 crore and apart from this, the net loss of the company has also reduced to Rs 5,515 crore from Rs 7,167 crore last year. On the basis of this strong performance and the news of fund raising, the share jumped by more than 42 percent in the last one month and crossed Rs 13.50. But the brokerage believes that this rally is not sustainable.

Three big reasons behind the forecast of decline:

Heavy burden of debt and spectrum

According to Motilal Oswal’s report, Vodafone Idea still owes spectrum and AGR (Adjusted Gross Revenue) worth about Rs 1.23 lakh crore to the government. This company will have to pay huge installments every year between financial years 2027 to 2032, which will put huge pressure on its cash flow.

Difficult target and decline of user base

Management aims to deliver double-digit growth in revenues and triple cash EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) between fiscal 2026-29. However, considering the continuously decreasing user base of Vodafone Idea compared to Jio and Airtel, achieving this target seems very difficult.

tough competition in the market

Even if Vodafone Idea expands its network by raising funds, financially strong companies like Airtel and Reliance Jio can stop its growth with their aggressive strategy.

Opinion of market experts: Motilal Oswal clearly says that for the long-term revival of Vodafone Idea, everything needs to be completely right but at present its chances are very less. The stock is trading well above its intrinsic value, so investors should exercise caution at this level.

Report: Sushil Kumar Sah